Compliance and Legal

The trending in workplace sexual harassment cases reported to the U.S. Equal Employment Opportunity Commission (EEOC) has steadily declined in the past decade, with women in-particular filing fewer complaints.

Despite this encouraging fact, the impact on a small business should it face a sexual harassment lawsuit can be devastating - both to its finances and its reputation.

No matter how many employees you have, as a business owner you need to understand and comply with sexual harassment laws - for your sake and for the sake of a professional working environment.

Below I’ve provided background on sexual harassment law, as well as tips and resources for establishing a sexual harassment policy.

What is Sexual Harassment?

Sexual harassment occurs when one employee makes continued, unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature, to another employee against his or her wishes.

The most common forms occur when promotions, benefits, or employee reviews are tied to sexual activity or when an employee experiences hostile work place harassment that makes them uncomfortable, e.g. sexually charged remarks, unwelcome advances, the display of sexually explicit images, etc.

Understanding Sexual Harassment Law

Sexual harassment law was first enacted as part of the U.S. Civil Rights Act of 1964, which led to the formation of the U.S. Equal Employment Opportunity Commission (EEOC). It applies to employers with 15 or more employees.

If one of your employees is sexually harassed, the law can hold your company liable even if the harasser is a fellow employee, client, or even a vendor. As a rule, however, you're only considered liable if you knew about the problem and did nothing to stop it.

In 1998, the Supreme Court determined that in certain instances employers can be held legally responsible for unlawful harassment by its supervisors. This was based on the premise that 1) an employer is responsible for the acts of its supervisors, and 2) employers should be encouraged to prevent harassment and employees should be encouraged to avoid or limit the harm from harassment.

Business owners, managers and the business culture they propagate are critical components of any no-tolerance plan regarding sexual harassment.

Should harassment occur, you will need to provide evidence that you took appropriate steps to prevent and handle the incident. This is why a sexual harassment policy is critical.

Sexual harassment training programs in the workplace are a key part of any sexual harassment policy. In fact, 62 percent of U.S. businesses now offer some form of sexual harassment prevention training programs for managers and employees - and, while these programs are not mandated by law, they represent a positive step toward prevention that can also protect an employer in the event that a sexual harassment lawsuit is filed.

Caron Beesley has over 15 years of experience working in marketing, with a particular focus on the government sector. Caron is also a small business owner and works with the Business.gov team to promote essential government resources for small business owners.

HCX Facts

Healthcare Costs grew a cumulative 138% between 1999 and 2010 and outpacing cumulative wage growth of 42% over the same period. Average employer costs for health insurance per employee hour rose from $1.60 to $3.35 during the 1999 to 2010 period. This almost 110% increase in average costs per hour was much larger than the 39% increase in average employer payroll costs per hour for these workers KFF